Electronic Arts profit lifts stock of game maker

Updated 5:22 pm, Wednesday, May 7, 2014

Hewlett-Packard, which has been focusing on its server business, plans a new suite of cloud products.

Hewlett-Packard, which has been focusing on its server business, plans a new suite of cloud products.

Photo: Donna Carson, Reuters

Electronic Arts profit lifts stock of game maker

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EARNINGS

Results boost Electronic Arts

Shares of Electronic Arts soared Wednesday on the strength of its fourth-quarter earnings that beat Wall Street expectations.

The Redwood City video-game maker led the industry in sales for a new generation of consoles. Its shares jumped 21 percent, closing up $5.90 at $33.95.

EA said profit was $914 million (48 cents per share). Analysts had been expecting 11 cents per share.

Under new Chief Executive Officer Andrew Wilson, the company is making progress toward its goal of becoming a top provider of games sold online rather than through retail stores. Digital revenue accounted for 45 percent of sales, said Blake Jorgensen, EA's chief financial officer.

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"Digital, for us, is the focus," Jorgensen said. "We're building more and more live services associated with our games, and we're also seeing continued growth in full-game downloads."

The company benefited from a strong slate of titles for Microsoft's Xbox One and Sony's PlayStation 4 game consoles. "FIFA 14," "Titanfall" and "Battlefield 4" were three of the top five best-selling titles across all platforms in the U.S., Canada and Europe, Jorgensen said.

In the current quarter, the company expects to benefit from a World Cup football title for older-generation consoles and a UFC fighting game featuring kung fu legend Bruce Lee, Jorgensen said.

CLOUD COMPUTING

Hewlett-Packard plans new products

Hewlett-Packard is making a big bet on cloud computing, announcing Wednesday that it will invest $1 billion in a suite of open-source cloud products that position the Palo Alto company as a competitor to cloud services like Amazon Web Services and Google Compute Engine.

HP's cloud products and services, dubbed HP Helion, mark a shift away from what has been the company's primary business, selling management software and technology hardware to corporate data centers. Instead, HP will encourage companies to build their own cloud systems, using HP's version of the open-source cloud software OpenStack.

The company's existing cloud computing offerings will also move under the HP Helion name.

HP joins Microsoft, where new CEO Satya Nadella is racing to embrace the "mobile-first cloud-first" world.

SOCIAL NETWORKS

LinkedIn teams with Evernote

LinkedIn said Wednesday that it is working with Evernote to provide business-card scanning capability.

LinkedIn members will be able to scan a business card using Evernote's mobile app and directly connect with the contact on LinkedIn. In the Evernote app, LinkedIn users can view information such as profile photos, job titles and company information.

Previously, LinkedIn offered a similar service with its CardMunch app, which it said it will discontinue as of July 11.

Evernote will take over what is a relatively small function for LinkedIn, but the partnership is just one piece of LinkedIn's larger plan to attract more users.

The company has said previously that a large part of the plan includes partnerships with companies that have already perfected certain services, like Evernote, or enterprises like Samsung, which will integrate the social network for professionals into its Galaxy S5 smartphone.

"LinkedIn is committed to doing fewer things better," said Bob Rosin, vice president of business development, in a blog post.

"And by expanding our partnership with Evernote we can ensure that our members have the best card scanning experience possible while staying focused on what we do best."

PUBLISHING

Jet magazine goes digital only

Jet magazine, which first hit newsstands at the dawn of the civil rights movement, is ceasing regular print publication and transforming into a digital magazine app.

Johnson Publishing Co., which owns Jet along with Ebony magazine, says the switch will occur at the end of June. The Chicago company says the move is an effort to adapt to its readers' growing desires for quicker and easier access to information.

Jet, conceived by Johnson Publishing founder John Johnson as a newsweekly digest for African Americans, was founded in November 1951. It currently publishes every three weeks.

Linda Johnson Rice, chairwoman of Johnson Publishing, said her father named the publication Jet, because he believed everything in the world had begun to move faster than before, and there was more news and less time to read it.

"He could not have spoken more relevant words today," Rice said in a statement. "We are not saying goodbye to Jet, we are embracing the future as my father did in 1951 and taking it to the next level."

The new weekly digital magazine app will include video interviews and other digital elements. Breaking news will be updated daily and the company will publish an annual print edition.

The app will be available for all smartphone and tablet platforms. It will feature entertainment news, along with coverage of politics, pop culture and social issues that impact African Americans.

According to its website, Jet has about 720,000 subscribers.

ECONOMY

Productivity falls, labor costs rise

U.S. productivity fell in the first quarter while labor costs rose, reflecting the economic slowdown caused at the start of the year by harsh winter weather.

The Labor Department said Wednesday that productivity declined at an annual rate of 1.7 percent in the January-March period, after growing at a 2.3 percent rate in last year's fourth quarter.

The falling productivity coupled with a slight increase in hourly compensation led to labor costs rising 4.2 percent in the first quarter. Labor costs had fallen in the previous two quarters.

Productivity measures output per hour of work.

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